Price Location Matters (03-04-21)

Barone, Coulter, and Li determined that where prices are marked (their vertical position) determines how that price is perceived. The researchers asked: “Can changing the vertical location of a price (e.g., presenting it above or below a product image in an advertisement or retail display) influence consumer response? . . .  several lab and field investigations [conducted by the Barone-lead team] demonstrate that prices provided in low (vs. high) locations lead to lower price perceptions, more favorable purchase intentions, and higher in-store sales. . . . such price location effects . . .  arise only among individuals who associate down with less and up with more. . . . low price locations can also induce consumers to perceive a product as being less costly without adversely affecting quality perceptions. . . . firms can improve consumer response simply by showing prices at the bottom (vs. top) of a focal product in a marketing stimulus.”

Michael Barone, Keith Coulter, and Xingbo Li. 2020.  “The Upside of Down:  Presenting a Price in a Low or High Location Influences How Consumers Evaluate it.”  Journal of Retailing, vol. 96, no. 3, pp. 397-410, https://doi.org/10.1016/j.jretai.2020.02.003